John Ivison: Liberal platform is buyer beware

OTTAWA — If you are what the British playwright Michael Frayn called a herbivore — a do-gooder, a signer of petitions, someone guiltily conscious of your advantages — you will immediately love the Liberal election platform, released Sunday.

If you are a carnivore — a meritocratic thruster trying to amass as many goods as you can — you will take a kneejerk dislike to it.

For the broad middle ground of Canadians who can’t give up bacon but find the idea of vegetarianism seductive, you should approach the new “Liberal Family Pack” with caution. It is not quite what it proposes to be. The “family pack” billing suggests Canadians will get a bargain if they vote for a Liberal government. But buyers should be aware they may soon feel remorse when they find out how long it is on spending and how very short on investment.

First off, it should be acknowledged the platform is magpie-like in its appropriation of shiny objects from the other federal parties. Like the 2006 Conservative platform, it highlights five big ideas: the Learning Passport to help families pay for college; the early childhood learning plan to create more child-care spaces; a family care plan, to help family caregivers take time off work; a planned enhancement of the Canada Pension Plan; and a $400-million Green Renovation Tax Credit to help retrofit homes.

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The platform is sprinkled with sound and original spending initiatives. Unfortunately, none of the sound ideas are original and few of the original ideas are sound. The retrofit tax credit is a dead-ringer for the eco-Energy Plan in the recent Tory budget, although this version is permanent. Other ideas, such as the Volunteer Fire-fighter Tax Credit and the $700-million Guaranteed Income Supplement have also been lifted wholesale from rival parties.

The Liberal plan to increase spending on aboriginal education by $500-million is long overdue and diverting the money raised from a wireless spectrum auction to improving Internet access in rural areas looks a good investment. There are some interesting ideas on creating a People’s Question Period, where the Prime Minister would take questions from Canadians online. And a federal government push for Elections Canada to investigate online voting is also intriguing.

There are the usual Liberal attempts at social engineering that rarely work — $40-million to help children from low income families eat healthy food; $80-million to create a “Buy Local” fund.

But the real objections are the wobbly foundations on which the whole plan is built. The final page of the platform has a chart that indicates the funds available and new spending commitments are balanced. But those numbers are premised on saving $5.2-billion in year two by returning the corporate tax rate to 18% from the current 16.5%. Mr. Ignatieff said in a press conference that he has made “cautious and prudent estimates of the revenue implications…We have to focus on what government must do, not what it would like to do in some ideal universe.”

That’s not the view of Jack Mintz, head of the School of Policy Studies at University of Calgary and world renowned tax expert, who has condemned the Liberal plan on corporate taxes as “irresponsible” policy that would threaten up to $50-billion in capital spending and cost 200,000 jobs.

In an interview Sunday, he said the Liberal plan over-estimates the revenue generated annually by around $700-million and doesn’t take into account the expansion of the corporate tax base created by the government’s current plan of lowering the rate to 15% next year.

The Liberal plan does very little to suggest how Michael Ignatieff intends to grow the Canadian economy. There are two policies in the platform that could conceivably create jobs — $290-million over two years to give employers an Employment Insurance holiday for hiring young people; and $175-million for an Innovation and Productivity tax credit to encourage investment for start-up companies.

But that accounts for a fraction of the $8.2-billion the Liberals plan to spend on social programs in their first two years in government. The platform cites the concerns of Bank of Canada Governor, Mark Carney, about Canada’s poor productivity and under-investment in machinery and equipment, yet not only does it do nothing to improve the country’s competitiveness, by increasing the cost of doing business it makes things worse.

Mr. Ignatieff cites his policies on post-secondary education as the main plank of his investment strategy, but Mr. Mintz is skeptical about the ability of governments to create jobs solely by subsidizing education.

This election comes down to whether Canadians want continuity or change. The Liberal pitch is that families have lost ground over the past five years. They have identified a new sense of caution and retrenchment among families who are working harder than ever but feel they are falling behind. The Liberal case for change is that unemployment, personal debt and the nation’s finances are in worse shape than they were when the Harper government took power.

This is true but ignores the Great Recession that took place in the midst of those five years. Even after the financial crisis, Canadians are better off than they were five years ago by many metrics — GDP per capita is up, hourly wages have outpaced inflation and national net worth per capita, which reflects assets like houses and investments, has reached record highs. One suspects most Canadians feel like they have dodged a bullet.

Mr. Ignatieff talks a good game about creating equal opportunity, building democracy and protecting families. But at the end of the day, the numbers just don’t add up. Buyers should beware.